The Committee has examined in detail the issues pertaining to current demand for a separate

State of Telangana as well as the demand for maintaining the present status of keeping the State united. After going into all aspects of the situation as well as keeping in view the local, regional and national perspective, the Committee considers that the following solutions/possible options may offer the best way forward.

(i) Maintain status quo

This implies treating the issue as basically a law and order/public order challenge to be handled by the State government, not requiring any major intervention by the Union government. Such an approach is based on the history of the last 54 years when the demand for a separate State of Telangana was dealt with mainly in a political manner by accommodating different interest groups in the government and the party structure. At the same time, it is noticed that the emotional appeal of ‘Telugu Pride' was invoked to keep separatist sentiments in check with the result that the demand for Telangana subsided, but did not entirely disappear. It resurfaced in the post-2000 period with the rationale virtually being the same as in the earlier movements for Telangana, such as the partial implementation of the Gentlemen's Agreement, unsatisfactory implementation of Presidential Order of 1975 on employment issues, the gap in educational standards among the regions, the denial of fair share of water and irrigation resources, and perceived neglect in economic development of Telangana region. Above all, there were the sentimental and emotional reasons and attachment to a long held desire for a separate State of Telangana. The Committee did not find any real evidence of any major neglect by the State government in matters of overall economic development.

However, there are some continuing concerns regarding public employment, education, and water and irrigation, which have been dealt with in the respective chapters of the Report. Since the emotional satisfaction of the people of Telangana will not be met if no steps are taken, it is anticipated that immediate backlash will take place in the form of violent agitations in the region which may continue for some time. Besides, sporadic agitations on specific demands in different areas may continue even for a longer period. With Telangana Praja Front (TPF-Gaddar) once again joining hands with TRS, indications are that such agitations are likely to be highly emotional and serious. These agitations will have immediate impact on the normal life in and around Hyderabad, thus once again affecting the city's image and putting a question mark on its economic growth momentum. As has happened earlier, people's representatives from the region MLAs/MLCs/MPs belonging to different political parties would come under pressure to resign, which may once again lead to a political crisis. The Maoist movement is also likely to get a fillip in such a situation. In view of the complex background of the situation and the rather serious and sensitive emotional aspects involved, the Committee is of the unanimous view that it would not be practical to simply maintain the status quo in respect of the situation. Some intervention is definitely required and though maintaining the existing status quo is an option, it is favoured the least.

(ii) Bifurcation of the State into Seemandhra and Telangana; with Hyderabad as a Union Territory and the two States developing their own capitals in due course

(a) This option underscores the pivotal position of Hyderabad historically and its economic significance at all levels — regional, national and international. Hyderabad is now regarded as an engine of growth in view of its position in the global economy as being a hub of Information Technology and Information Technology Enabled Services (ITES). Besides, it has a thriving real estate industry with strong participation of national players in addition to regional firms. It also has a manufacturing base in the nearby Rangareddy district which has attracted investors from Coastal Andhra and Rayalaseema regions as well as from outside.

A number of public sector organisations, national institutions, civil and military establishments and defence institutions are also located in and around Hyderabad. Over the years, migration has completely changed the demographics of the city and the total number of people from other regions and from outside the State residing in the metropolis is very substantial and estimated to be more than one-third of the population of Greater Hyderabad Metropolitan area. Only continued economic growth can lead to expansion of employment opportunities and therefore, the current economic inter-linkages of Hyderabad with other regions need to be developed and preserved so that there is an assured climate of certainty and stable business environment.

The situation of Hyderabad can be compared with the metropolis of Brussels in Belgium. In 1968, Belgium had erupted in a series of riots on the question of who had a claim to Brussels city, which is barely inside the northern Flammand region. The only way to settle the issue was to declare that Belgium was a country of two cultures and three regions.

It is to be noted that Belgium has a population of about 10 million, out of which 6 million in the northern part of the country are Flemish speaking while 4 million, who are mainly concentrated in the south of Belgium, speak French. There is also a small German speaking minority. Belgium is thus constituted as a federation of three language communities — Flemish, French and German. The capital region of Brussels, therefore, is organised altogether as a separate bilingual capital region with an independent administrative setup and jurisdiction. Andhra Pradesh, however, by and large, has a common culture and was constituted as the first linguistic (Telugu) State. In our context, when there are equally strong competing claims on a thriving urban conglomerate, the Union Territory model is often considered workable and accordingly, in this option it is suggested that if the State of Andhra Pradesh is divided into two units, then Hyderabad could become a Union Territory with a common capital for the present and the States eventually developing their own capitals over time. As revenues from the proposed Union Territory would go to the Central government, a mutually agreed formula for equitable apportionment of the grants could be devised for all the three regions.

(b) It is considered that this option would be more acceptable to the people from Coastal Andhra and Rayalaseema regions as their economic interests in Hyderabad would remain protected though they would prefer that the State stays united with Hyderabad as its capital. However, this option also has severe implications and will, in all probability, give rise to a renewed and serious agitation by the people of Telangana insisting on inclusion of Hyderabad only in Telangana and making the functioning/ governance of the Union Territory a very difficult task. Besides, the geographical contiguity and access to Hyderabad, to which strong economic and personal linkages of people from coastal Andhra and Rayalaseema exist, will be physically cut off with two districts i.e. Nalgonda towards Coastal Andhra and Mahabubnagar towards Rayalaseema (both districts part of Telangana) lying in between the boundaries of the three regions. This situation could be used by agitators in blocking supplies, drinking water etc. Another drawback of this option will be that the sentimental and emotional satisfaction of having a new State of Telangana would remain unfulfilled if Hyderabad were not to be included in it. If Hyderabad, which has always been considered an integral part of Telangana, does not form part of the new State, it will give rise to serious discontent and agitations and the problem will continue.

In the Committee's assessment, there is a definite likelihood of serious immediate backlash in Telangana region causing similar problems as have been indicated in option (i) above. On overall consideration, therefore, the Committee found this option also not practicable.

(iii) Bifurcation of State into Rayala-Telangana and coastal Andhra regions with Hyderabad being an integral part of Rayala-Telangana

(a) This suggestion was put to the Committee as the second preference by some sections of the people of Rayalaseema region. Their first preference was for a united Andhra. AIMIM also, while strongly advocating the cause of united Andhra Pradesh as being in the best interest of economic growth and welfare of the minority Muslim community, stated that in the event of division of the State it would be in the community's interest to form a new State combining the regions of Telangana and Rayalaseema. Their argument is based on the demographic composition of Rayalaseema which has over 12 per cent Muslim population as compared to just about 8 per cent in the rest of Telangana (i.e. excluding Hyderabad). The Muslim community in this scenario will get greater political space. A second rationale for combining the two regions is suggested by the economic analysis of the State which has shown that Rayalaseema is the most backward of the three regions. It is dependent on Telangana for water and irrigation resources and values its access to Hyderabad for employment and education. There is also greater social homogeneity between the two regions. It is for these reasons that given a choice between coastal Andhra and Telangana, the Rayalaseema people may prefer to join Telangana. Our analysis suggests that primarily taking economic and social parameters into account, this would be a viable and sustainable option.

(b) On the other hand, however, such a move will be strongly resisted by all political parties and groups from Telangana region (outside of the old city of Hyderabad) as most of them believe that Rayalaseema political leadership has been one of the most important contributory factors in keeping them at a disadvantage while at the same time exploiting their land resources. The Committee discussed the possibility of this option with almost all the groups of Telangana and noted that not even one of them favoured such an option and as a matter of fact, conveyed their vehement opposition to it.

(c) In a nutshell, this scenario is not likely to be accepted either by the pro-Telangana or by the pro-united Andhra protagonists. Besides, it is one in which one can anticipate emergence of fundamentalist forces from amongst the competing political parties and groups. Agitations, particularly in Telangana area, against such a recommendation are also not ruled out. While this option may have economic justification, the Committee believes that this option may not offer a resolution which would be acceptable to people of all three regions.

(iv) Bifurcation of Andhra Pradesh into Seemandhra and Telangana with enlarged Hyderabad Metropolis as a separate Union Territory. This Union Territory will have geographical linkage

(a) This option flows from option (ii) which highlights the characteristics of Hyderabad as a growing global city. The city's boundaries have recently been revised to extend the municipal limits from the 175 Km {+2} of the erstwhile MCH to 625 km {+2} of the current GHMC. The erstwhile HUDA has been replaced by an expanded HMDA, headed by the Chief Minister, with a substantial area of 7,073 km {+2}, which is about twice the size of the State of Goa. In this option an extended Union Territory of approx. 12,000 km {+2} has been proposed. The extended Union Territory will comprise 67 mandals, 1,330 villages, 12,430 km {+2} area.

(b) In the view of the Committee, Hyderabad region is critical to the growing economy of the State and the nation as a whole. Its GDP is becoming increasingly centred in the modern services and transport sector which accounted for 58 per cent of its GDP in 2005-06, up from 43 per cent in 1999-2000. Being the main software centre of Andhra Pradesh, it also accounts for 15 per cent of the national IT exports. Besides, infrastructure and real estate are the other key growth areas in Hyderabad. As discussed earlier , the city has deep social linkages with the rest of the State and this is reflected in the transport links as well as in the immigration from the other regions. Earlier migrants from outside the State were mainly from Karnataka and Maharashtra, but of late the share of eastern and northern States has visibly increased and the pattern is now closer to that of Mumbai which reflects its growing integration with the national economy. Hyderabad is also a strategically important city for the nation. It hosts many institutions of excellence and establishments of strategic importance. These not only source talent from all over the country, but are also vital from the national security perspective.

(c) In view of these considerations, it was found necessary to suggest an expanded Union Territory as an option. The merit of this suggestion is that all the three regions will have geographical contiguity and physical access to Hyderabad metropolis. It may also house the capitals of both Telangana and Seemandhra as in the Chandigarh model with a separate Union Territory administrative setup. Most of the administrative, police, etc. officers will be drawn from the existing State cadres. Plenty of space will be available for infrastructure development. Since this would be a reasonably larger area with a population of well over 10 million people, the model could be a mix of Chandigarh and Delhi UTs i.e. it may have its own Legislative Assembly.

As has happened in Chandigarh, over the years its neighbouring towns Mohali, Derabassi, Panchkula and Parwanoo, etc. in Punjab, Haryana, and Himachal Pradesh have seen remarkable growth and development. Also around Delhi, towns like Gurgaon, Sonepat and Faridabad in Haryana and Ghaziabad, Noida in U.P. have come up and are experiencing high growth and appreciable development owing to the capital growth centre. Similarly, within this proposed new Union Territory, all the three neighbouring regions (Telangana, Coastal Andhra and Rayalaseema) will automatically piggyback on the economic engine of Hyderabad metropolis and gain full momentum for achieving appreciable economic growth and employment.

This option can perhaps be made acceptable to all three regions. It is anticipated that demand for a separate Rayalaseema may also get initiated in the event of separation of Telangana and if a decision to that effect is taken for a separate Rayalaseema at any given time in the future, the Rayalaseema capital could also be housed in this larger Union Territory. Since the revenues from the U.T. will go to the Central exchequer, the Union Government in consultation with the new States, representing all the three regions, can work out a mutually acceptable formula for equitable apportionment of the grants based on the revenues earned from the Union Territory.

(d) On the flip side, it may be stated that this proposal will receive stiff opposition from Telangana protagonists for two reasons (i)Telangana has always considered Hyderabad as an integral part of the region and they would not be happy with a common capital of all the regions located in Hyderabad and (ii) partly merging portions of the two Telangana districts i.e. Nalgonda and Mahabubnagar may also be resented (although in the long term these districts/mandals are expected to grow economically at a much faster pace than at present).

Besides, there may be opposition from all the three regions that part of the State i.e. Hyderabad and adjoining areas will become a Union Territory. As Hyderabad is a major economic hub and the capital city, which the State has nourished and developed over a period of time, this proposal may find opposition from several quarters. As such, while there are some positives of this option it may be difficult to reach a political consensus in making this solution acceptable to all. Particularly from Telangana, serious resistance and agitation on this issue could be expected.

It also has to be borne in mind that Telangana with or without Hyderabad is likely to experience a spurt in Maoist activity. This aspect has been covered in detail in the Chapter on Law and Order and Internal Security.

(v) Bifurcation of the State into Telangana and Seemandhra as per existing boundaries with Hyderabad as the capital of Telangana, and Seemandhra to have a new capital

(a) In this option there would be a clear division of Andhra Pradesh into two States – Telangana and Seemandhra and in the interim, Hyderabad will continue to house both the capitals till a new capital for Seemandhra is created. For creation of a new capital, a large investment would be required, provision for which will have to be made both by the Union and the State governments. This option implies accepting the full demands of a large majority of Telangana people for a separate State that will assuage their emotional feelings and sentiments as well as the perceived sense of discrimination and neglect. The Committee's impression, gained during its extensive tours of Telangana region, indicated that a very large number of people from Telangana were highly supportive of the demand for a separate Telangana; an appreciable segment was found to be neutral; while some sections were not in favour of it. The Committee observed — Strong pro-Telangana elements in Warangal, west Khammam, Nizamabad, Karimnagar, southern Adilabad, Siddipet area of Medak, parts of Nalgonda and Mahabubnagar and some areas of Ranga Reddy. The most vociferous and agitating sections are the students (particularly in Osmania and Kakatiya Universities), the unemployed youth, the lawyers and the non-gazetted government employees.

The neutral elements include the original population of Hyderabad, including large segments of AIMIM, the villages/mandals bordering Maharashtra, Chhattisgarh, coastal Andhra, Rayalaseema and Karnataka; the settler villages/mandals in the Telangana heartland (Khammam, Karimnagar, Nizamabad etc.) and the migrant population in HMDA from Seemandhra and other parts of the country;

The aspirations of a large section of tribals on the northern side of Telangana, particularly the hill tribals, are for a separate State of Manyaseema and of the tribal belt which cuts across Orissa, Chhattisgarh, Andhra Pradesh and Maharashtra, to be under a single administrative system; the SCs/BCs and the minorities have their own aspirations for appropriate political space, economic development and reservation benefits.

(b) The implications of this option are that (i) if earlier agitations are anything to go by, this decision will give rise to serious and violent agitations in the Coastal Andhra and Rayalaseema regions, where the backlash will be immediate; the key issues being Hyderabad and sharing of water and irrigation resources; (ii) there will be every likelihood of pressure being put by the general public on the leaders of the political parties of Seemandhra region (MLAs/MLCs/MPs) to resign and fight for united Andhra Pradesh.